Tennessee lawmakers push to pause state’s gas tax

NASHVILLE, Tenn. (WSMV) -Monday, there was a renewed call to pause the gas tax in Tennessee to help people feeling pain at the pump. Over 90 days, some Democratic lawmakers said it would save families a total of $224 million. Where does all that money usually go, and would those departments be hurting if the moratorium goes through?

Two Democratic lawmakers are pushing to pause Tennessee’s gas tax. Representatives Bo Mitchell and John Ray Clemmons recently wrote a letter to Gov. Bill Lee asking to stop the state’s collection of gas and diesel taxes for 90 days, which they said would equal about $224 million in savings for families.

“Why are we not putting money back in Tennesseans’ pockets,” Rep. Mitchell asked.

The gas tax in Tennessee is estimated to bring in about $900 million in the fiscal year 2022. Around $26 million goes to the state general fund. Another $332 million goes to cities and counties. $538 million goes to TDOT to help with resurfacing, construction, and more.

WSMV 4 asked the lawmakers if this goes through, would projects of TDOTS like pothole repair be put on hold?

“No, absolutely not,” Rep. Clemmons said.

The lawmakers said in the general fund, there’s more than $1 billion of surplus which they said would be used to replace the $224 million lost during the tax break. A TDOT spokesperson told WSMV 4 that if it were covered by a general fund transfer, there would be no fiscal impact to TDOT.

Some Republicans are not on board.

“Eliminating the gas tax does nothing to benefit consumers and it is completely unenforceable.,” Transportation committee chairman Dan Howell said in part in a statement. “Gas station owners set their own prices so there’s no guarantee any savings would be passed on.”

When asked Monday if he is considering issuing an executive order on the gas tax moratorium, Gov. Lee did not answer directly. “I am looking at proposals every day about how we can lower taxes and costs to Tennesseans, but there are no definitive plans,” Gov. Lee said.

The Democrats pushing for this said that if Lee does not issue an executive order, it would be accomplished via the budget implementation bill or stand-alone legislation, but they said they would need support across the aisle to get it done.

Howell’s full statement can be found below.

“Eliminating the gas tax does nothing to benefit consumers and it is completely unenforceable. Gas station owners set their own prices so there’s no guarantee any savings would be passed on. Even if we could make gas station owners lower prices, it would defund essential revenue that pays for roads, bridges, and other infrastructure. Ultimately, it would make inflation worse by creating a huge misalignment between supply and demand. As we do every year, Republicans in the General Assembly will be bringing forth meaningful tax relief that puts money back into the pockets of taxpayers. We’re working on several proposals to expand tax cuts that directly benefit Tennesseans and support local businesses like our sales tax holidays.

As we do every year, Republicans in the General Assembly will be bringing forth meaningful tax relief that puts money back into the pockets of taxpayers. We’re working on several proposals to expand tax cuts that directly benefit Tennesseans and support local businesses like our sales tax holidays. "

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